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>Social Security transfers a little under 5% of GDP from working people to old people And since it is capped at $132,900, the burden falls on working people an
by omegaworks 7y ago
>Social Security transfers a little under 5% of GDP from working people to old people
And since it is capped at $132,900, the burden falls on working people and not on those making more. There is no reason for that cap to exist. In fact, that the ultra-wealthy aren't progressively taxed to fund Social Security ensures the burden falls entirely on people dependent on their labor for survival.
- sk5t 7y agoIn theory, SS payouts to each individual are proportional to each individual's payments in. In that light what proper purpose is there in forcing higher wage earners to save more?
- gshubert17 7y agoThe relationship between average wages and SS benefits: those earning lower amounts receive a higher percentage of their wages as benefits, compared to those earning higher amounts. See [0]. Another way to view this is that there is a welfare component to Social Security. And then there is a component that is based on what you earn. This was the basic compromise when Social Security was created in the 1930s. The upper limit to FICA (Federal Insurance Contributions Act) taxes on wages, is a way to downplay the welfare aspect of Social Security. Some people think we should acknowledge the welfare aspect and go ahead and tax all wages (like the US does for Medicare), but others don't think that's fair to high wage-earners. [0] https://financialducksinarow.com/4414/social-security-income-replacement-rates/ https://financialducksinarow.com/4414/social-security-income...